ms-usa_canada-automobile-0506 by stariya

VIEWS: 2 PAGES: 38

									     MARKET SURVEY
           ON
AUTOMOBILE PARTS INDUSTRY
            In

                U.S.A.
                 AND
               CANADA


               (2005-06)




                 PREPARED BY:
  ENGINEERING EXPORT PROMOTION COUNCIL-INDIA
                   CHICAGO
COUNTRY PROFILE




Full Country Name:   United States of America

Population:          (February 2006 est.) is 298 million

Capital City:        Washington, District of Columbia

Ethnic Groups:       White 81.1%, Black 12.9%, Asian 4.2%

Currency:            Dollar: 1 US Dollar or 100 cents.

Government:          Constitution-based Federal Republic

Climate:             Mostly temperate, but semi-arid in the

                     great plains west of the Mississippi

                     River.
BASIC ECONOMIC FACTS
GDP:                      Purchasing power parity - $11.6 trillion (2006)

GDP per head:             Purchasing power parity - $39,496 (2006)

Annual GDP Growth:        3.5% (2006)

Inflation:                4.0% (January 2006)

Unemployment:             4.7% (January 2006)

Major Industries:         Highly diversified and technologically advanced
                          industry; petroleum, steel, motor vehicles,
                          aerospace, telecommunications, chemicals,
                          electronics, food processing, consumer goods,
                          lumber, mining

Major Trading Partners:   The US is a global trader with global markets.
                          Its main trading partners are Canada, Mexico
                          and China.

Exports:                  $1.3 trillion (2005)

Exports - commodities:    capital goods, automobiles, industrial supplies
                          and     raw materials,    consumer goods,
                          agricultural products

Imports:                  $2.0 trillion (2005)
Imports - commodities:    Crude oil and refined petroleum products,
                          machinery, automobiles, consumer goods,
                          industrial raw materials, food and beverages

The Market:               It has an integrated economy and every major
                          industry is represented. With the exceptions of
                          a few import quotas and some strategic
                          industry ownership restrictions, there are no
                          limitations on foreign firms seeking to do
                          business in the US.

Trade in goods:           The total US import market in 2005 was $1,996
                          billion, as against $ 1769 billion in 2004.

Balance of Trade:         The trade deficit at the end of 2005 was $ 723
                          billion as against $ 617 billion in 2004.
Investment:                   FDI in the US reached $1,526 billion in 2004.
                              Although the US restricts FDI in some sectors
                              foreign investors are generally treated on par
                              with domestic business. There are no
                              restrictions on moving capital or profits.

Current Economic Situation:   In the third quarter of 2005, GDP growth was
                              4.1% on the back of strong consumption and
                              government spending. The forecast for 2006
                              growth is 3.4%. However, Hurricane Katrina
                              has increased the risk of higher inflation. CPI
                              inflation increased by 3.6% year-on-year in
                              August 2005 due to higher energy prices.
BRIEF ECONOMIC REVIEW
U.S. GDP growth is projected to grow at 3.7 % in 2006. World GDP growth is
projected at 3.25 percent in 2006. Thus we have seen strong, continuing U.S.
and world growth in spite of slow growth in Europe, modest growth in Japan, and
crude oil prices which are projected to remain high into the foreseeable future.
High oil and natural gas prices will add significantly to U.S. farm fuel and fertilizer
costs in 2006.

As the U.S. economy expanded at a healthy 3.5-percent pace in 2005, U.S.
agricultural imports more than kept pace. Total import value for fiscal year 2006
is projected at $63.5 billion, up $2 billion from $61.5 billion in the November 2005
forecast. The dollar‟s exchange rate has recovered closer to its 2004 levels after
depreciating in early 2005, helping Americans‟ purchasing power remain
relatively strong.

Current factors affecting current U.S. economic conditions are - Rising petroleum
costs have had a ripple affect on virtually every market segment. With no relief in
sight, future market conditions are uncertain. Coupled with inflation rising to a
nearly four year record high, the U.S. economy is in a somewhat sluggish growth
cycle. Industrial output was 4.5% at annual rate, and manufacturing indicators
show expansion. Moreover, consumer confidence is at a four year high.

Long-term U.S. interest rates continue to rise in 2006 from the near-record lows
of 2004 and the first half of 2005, reflecting increased world credit demand and
higher short-term U.S. interest rates. The Federal Reserve Board is expected to
continue to raise short-term interest rates to prevent future run-ups in inflation.
While consumer price index (CPI) faces inflation, largely due to higher energy
and industrial commodity prices, was 3.6 percent in 2005.
INTRODUCTION TO LOCAL MARKETS
The U.S. auto parts industry is reeling from the effects of higher steel costs as a
result of higher import tariffs imposed by the Bush administration. A bipartisan
House of Representatives has introduced House Concurrent Resolution 23 that
urges President Bush to request that the International Trade Commission (ITC)
include an analysis of the impact of the Section 201 steel tariffs on steel
consumers in the United States in its midterm review of the safeguard program.

According to Christopher M. Bates, president and CEO of the Motor & Equipment
Manufacturers Association (MEMA), the steel 201 program hit the automotive
products industry at a very bad time. Automotive suppliers said that the Bush
administration's protective tariffs on foreign steel have driven up their costs,
forcing them to cut jobs and consider importing steel and other materials. The
companies, who are some of the largest purchasers of U.S. steel, said they may
import more steel from countries that are exempt from the tariffs, such as Brazil,
Argentina and Turkey. They may also import parts that use steel, they said.

General Motors announced that by 2008, it will source $1 billion worth of auto
parts from India each year. This is more than eight times the $120 million the
company currently spends on parts manufactured in that country. According to P.
Balendran, vice president of General Motors India Auto parts in India cost 25
percent to 30 percent less than in North America or Europe. They are also
around 15 percent cheaper than South Korea and Mexico, but the quality is on a
par. GM now buys parts from about 110 Indian suppliers.

The automotive aftermarket industry is made up of replacement parts, specialty
products (accessories, performance and racing products), equipment, and
services. Due to a well-established and mature automotive parts and accessories
industry in India, excellent opportunities exist for Indian automotive suppliers in
America in these areas. Companies with products and services that are
innovative and price competitive have the greatest potential in the market. Indian
suppliers have performed well in the accessories and equipment markets, but
have been less successful in the hard parts, replacement parts and services
areas.

The performance, racing, and accessories segments have shown the greatest
growth in the American automotive aftermarket sector and are forecast to remain
strong in the future. Products for the compact performance car market show the
strongest growth in the USA. There is a strong trend toward greater cooperation
between the automotive aftermarket industry and the original equipment
manufacturers (OEMs) to incorporate more aftermarket products into their
original equipment products.
Americans love their cars. There are over 200 million passenger cars and trucks
in operation in the USA and Canada, with more than 20 million vehicles in
California alone. There are nearly 200 million licensed drivers in North America
and the average age for the cars and trucks in use is about 8.5 years. The North
American automotive aftermarket consists of more than 2500 suppliers. It is the
largest in the world, generating revenue of US$270 billion per year. It is
comprised of four major segments:
    1. replacement parts
    2. services and maintenance
    3. equipment
    4. specialty equipment (racing and performance accessories)

Movements to shorten and simplify the distribution chain are opening up more
opportunities for e-commerce, direct sales, and importation by distributors.
Additionally OEMs are getting out of the parts manufacturing business and are
tasking tier one and tier two companies to provide sub-assemblies and modules.
This opens the market for supply to the OEM of subsequent replacement parts
through the USA tier one, tier two and even tier three supplier chains.

Industry standards: There are a number of industry standards required by
automotive aftermarket companies depending on the specific product and its
purpose. These can include standards from:
    the American National Standards Institute (ANSI)
    Society of Automotive Engineers (SAE)
    Underwriters Laboratories (UL)
    Department of Transportation (DOT)
    Environmental Protection Agency (EPA)
    Federal Communications Commission (FCC)
    the Consumer Product Safety Commission (CPSC)
    Occupational Safety and Health Administration (OSHA)



LOCAL MANUFACTURERS
According to a study, sourcing in the auto component industry will generate $700
billions to low cost countries by 2015. Additionally, auto component sourcing from
low cost countries may increase from the present level of $65 billion to about
$375 billion in the same year. India, who already supplies components to leading
automobile companies in the world, could be a major beneficiary of increased
sourcing, as it could scale up its component outsourcing business. At present,
India is on its way as the global hub for international auto majors for exporting
Completely Built Units (CBUs), as well as for outsourcing components.
India is the manufacturing hub for particular car models of Hyundai, Ford, Skoda,
Suzuki and Mahindra. The country is also the component destination for Toyota,
GM, and Daimler Chrysler. In addition, India is also the 125 cc motorcycle center
for Mitsubishi and Yamaha.
BMW is considering building a manufacturing site in India and may finalize plans
of entering the Indian market this year. According to Helmut Panke, BMW
chairman of the management board, India offered good prospects for the
company and BMW was holding concrete talks on different options.
Just last February 2004, Panke said that it could be years before BMW moved
production to India. However, Panke's recent comments reveal that BMW is
speeding up production plans in India. The car giant may form a partnership with
a local company as it did in Russia, China and Thailand.


GLOBAL IMPORTS


                 India vs Global Competion ( U.S. imports of
                          Engines and Engine Parts)


                        5,000,000
                        4,000,000
                        3,000,000
       by 1000 U.S. $
                        2,000,000
                        1,000,000
                                 0
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             Value 2001      Value 2002       Value 2003    Value 2004       Value 2005


          India's Market Share of Other Automotive Parts
                       imported into the U.S.
                                                                  3%         2%
                                                            0%
                                                      1%
                                                    1%

                                     16%

                                                                       16%




                       31%

                                                                   24%
                                              6%

               Canada        China         Mexico   Japan        Brazil      Italy
               India         S.Korea       Taiwan   Other
                        Engines and Engine Parts
                                       1%
                                     1%
                                2%
                        4%
                   2%
                                                               23%

             22%




                                                                 23%
                          22%



    Canada    Mexico    Japan    China      S.Korea   Brazil    Italy   India   Other



IMPORTS FROM INDIA
Many other auto companies, such as Ford Motor Co., DaimlerChrysler AG, Volvo
AB, Volkswagen AB, and Mitsubishi Motors Corp., also buy parts from low-cost
countries. It is predicted that exports of auto parts from India will grow to $2.7
billion by 2010 from more than $1 billion currently. This partly explains the
troubles being suffered by U.S. auto-parts giants Delphi Corp. and Visteon Corp.
Both companies have been hurt by production cuts at GM and Ford.

Toyota Motor Co. (TM ) which makes Land Cruiser, Prado, Innova and Camry in
India has just started exporting 150,000 transmissions to other Toyota plants in
Southeast Asia. US auto giant General Motors said last week it expects to source
$1 billion worth of autoparts a year from India by 2008, compared with $120
million this year. Domestic car sales have soared by 25% in the past year, to
more than 1 million vehicles. Tata and Mahindra are exporting, while Hyundai
Motor Co. is using India as a manufacturing and export base for its compacts to
Europe. Indian forging and castings companies such as Bharat Forge Ltd. are
exporting 40% of production to clients like DaimlerChrysler and Cummins Engine
Co. Some Indian parts makers are seeing sales growth of as much as 30% a
year, and India's exports are expected to reach $2.7 billion by 2010 from $1
billion today.
                            India' s performance imports (Engines and Engine
                                                  Parts)

         by 1000 $ U.S.   140,000
                          120,000
                          100,000
                           80,000
                           60,000
                           40,000
                           20,000
                                0


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                                                                  India



In fact, Delphi said it is trying to hammer out a restructuring arrangement with
General Motors and the United Auto Workers in an attempt to stave off
bankruptcy. Delphi and Visteon also blamed their financial woes on high labor
costs put in place before the companies were spun off from their former parents
GM and Ford. It is reported that Delphi is shelling out a total of $130,000 per
hourly worker in annual wages and benefits. In the second quarter, Delphi spent
more than $100 million to pay hourly workers who were idle but still entitled to
some compensation.

"We can no longer wait to address this issue," said Delphi's acting chief financial
officer John Sheehan. "Our business outside of the U.S. is going very well, and
non-GM business is growing. This high U.S. legacy cost structure is overtaking
the good side of our company." Low production cost is major advantage of India.
Automobile parts made in India can cost as much as 30% less than equivalent
ones made in the U.S. and Europe and are about 15% cheaper than those from
South Korea and Mexico, according to General Motors.
Indian automotive aftermarket manufacturers can take advantage of the
multitude of niche opportunities that exist in the lucrative American automotive
aftermarket if they have:
    1. an innovative product
    2. competitive pricing
    3. aggressive marketing
    4. adequate production capabilities
Indian automotive aftermarket companies can also leverage their ability in
producing „short-runs‟ – production runs of a limited number of a product which
might be considered unprofitable to a larger, less-efficient China firm.
Continued consolidation and increasing global competition are forecast for the
automotive parts industry. For smaller second and third tier suppliers, the key is
likely to be establishing strong relationships with primary suppliers.
                               India's performance ( imports of Automotive
                                                 Parts)

                          350,000

         by 1000 $ U.S.
                          300,000
                          250,000
                          200,000
                          150,000
                          100,000
                           50,000
                                0




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                                                                  India



Market entry strategies
Typically your market entry strategy will require a solid business and marketing
plan which includes a local presence plus warehousing, etc. It is advisable to visit
the market prior to finalizing your plan. There are a variety of potential market
entry strategies that can vary according to the product and service, incorporating
such elements as:
    regulatory
    pricing
    competition
    positioning
    strengths, weaknesses, opportunities, threats (SWOT)
    promotion
    after-sales service

Many automotive companies have developed websites for marketing their
products online B2C and B2B. Additionally e-hubs or sourcing portals are being
developed whereby entire groupings of automotive aftermarket companies can
be found competing for medium to large orders.

Distribution channels
The distribution channels in the North American automotive aftermarket industry
can vary according to product and segment. These channels can include:
    utilizing the services of a manufacturer‟s agent or representative
    a local distributor
    direct sales
    joint venture
    manufacturing under license
    franchising
    online sales
MAJOR COMPETITORS
While U.S. auto parts suppliers employ over three times as many people as the
vehicle assembly sector, auto parts employment continues to trend downward as
import levels continue to swell.




The market share of the Big Three U.S. vehicle producers has fallen steadily
from 73% in 1996 to under 52.2% in October of 2005. With continued strong
growth in parts imports, U.S. parts makers are facing calls by automakers to
accelerate and pass on cost savings in parts production. The U.S. imported $77
billion of motor vehicle parts in 2004. In 2002, these imports accounted for 27%
of all shipments of vehicle components in the U.S. The nominal value of imported
motor vehicle parts more than doubled during the past decade, from $37 billion in
1995 to $77 billion in 2004.
Imports exceeded $40 billion in 1997, $50 billion in 1999, and $60 billion in 2002.
Exports increased from $34 billion in 1995 to a historical peak of $47 billion in
2000. Through most of the 1990s, exports of motor vehicle parts were roughly
equivalent to imports. Both imports and exports of parts declined by $3 billion in
2001.

While some auto parts imports are price-sensitive generic parts, a large share of
imports to U.S. final assembly plants is made up of engines and transmissions
produced by high skilled workers in developed countries like Canada and Japan.
Engine-related components are most heavily represented in imports, by a wide
margin. This category accounted for $23 billion of the $77 billion in imports in
2004.




Among the engine-related subsystems, two components at opposite ends of the
skills spectrum together accounted for more than one-half of these imports (and
one-sixth of all auto parts imports). At the highly skilled end, the single highest-
value category was complete engines. Vehicles assembled in the United States
contained $6 billion worth of imported engines in 2004, an increase from $2
billion a decade earlier. Imports from Canada were responsible for nearly half of
the increase in the decade, and imports from Mexico, Japan, and Germany for
most of the other half. U.S. assembly plants installed about 500,000 engines
manufactured in Canada and 250,000 from each of the following countries:
Mexico, Japan, and Germany.

At the least-skilled end was electrical wiring; 80% of wiring imports originate in
Mexico, which emerged as the leading producer of wiring harnesses in the
1970s. Relatively labor-intensive and easy to ship, wiring was the first major
component to be imported in large numbers. Imports in chassis, at $15 billion the
largest of the remaining systems, have made the greatest percentage gains
since 1990.
The chassis has become the principal “battleground” system between domestic
and imported sources. Engineering advances have transformed chassis modules
from high-cost production items requiring skilled labor to low-cost “generic” items
highly sensitive to labor cost savings. Among major chassis components, brakes
and tires had the highest levels of imports, $4 billion each in 2004. Steering,
suspension, and wheels each contributed about $2 billion to the import total.
Between 1995 and 2004, the level of imports quadrupled for wheels, tripled for
steering and suspension components, and doubled for brakes and tires.

Canada, Japan, and Mexico were the countries of origin for 72% of the parts
imported into the United States in 2004, totaling $22 billion from Mexico, $19
billion from Canada, and $14 billion from Japan. The same three countries had
accounted for 78% of total imports just a decade earlier. Mexico passed Canada
as the leading source of imports for the first time in 1999. Canada, Japan, and
Mexico have all been major exporters of engine components to the United
States, but differ in the other systems they export. Canada has been the leading
source of body and chassis components, as well as of assembled engines. Body
and chassis components are bulky metal structures that have traditionally been
built close to final assembly plants.

Japan has been the leading exporter of drive train components and a close
second to Canada in chassis components. On the one hand, China‟s role barely
registered in the statistical tables: Only 5% of all U.S. auto parts imports (2% of
the total U.S. market) in 2004 came from China. So China‟s impressive annual
growth rate of 58% between 1995 and 2004 started from a very low base. Still,
by June 2005 China had moved past Germany to become the fourth largest
source of auto parts imports for the U.S.

From China, the rapid increase was overwhelmingly in aftermarket parts (sold to
retailers not manufacturers) rather than original equipment. For example, 29% of
all imports from China during the first half of 2005 were to after market. China
passed Canada as the leading source of wheels in 2002 and has expanded its
share of the market since then. Producers of aftermarket parts face more
pressure to minimize price than to maximize quality. There is a universal
expectation that China will play a major role in all facets of the world‟s motor
vehicle industry, including original equipment parts production. In 2004, GM
imported 124,000 2.4-liter V-6 engines from Shanghai to the United States for its
Equinox sport utility vehicles. In 2005, Toyota imported 25,000 2.4-liter engines
to Japan from a joint venture with Guangzhou Automobile Group called Guangqi
Toyota Engine Co.

GM recently announced that it expects to increase its original equipment parts
purchases from China twenty fold in six years, from $200 million in 2003 to $4
billion in 2009, while spending around $5 billion on sourcing for its China
production. A number of U.S. original equipment parts supplier companies have
also begun setting up shop in China.
Auto parts production is highly integrated across North America: In 2004, 55% of
U.S. auto parts imports came from Mexico and Canada and over three-quarters
of U.S. auto parts exports were headed for these two countries. But cost
pressures are reshaping the global footprint of auto parts sourcing. Since 2001,
U.S. auto parts exports have been flat, whereas imports have continued to grow
at a fast clip.


                  India vs Global Competion for U.S. Market
                         (imports of Automotive Parts)

                       25,000,000
                       20,000,000
                       15,000,000
         by 1000 $U.S.
                       10,000,000
                        5,000,000
                                0
                                       Me     C    J     Ch     Ta    Br   In
                                         xic a na a pa     in
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             Value 2001   Value 2002     Value 2003               Value 2004          Value 2005




                  India vs close competitors (U.S. imports of
                               Automotive Parts)

                      4,000,000
                      3,000,000
        by 1000 $U.S. 2,000,000
                      1,000,000
                             0
                                     Va         Va            Va            Va         Va
                                       lu         lu            lu            lu         lu
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                                                1             2             3          4             5

                             China     Taiwan       Brazil           India
TRADE SHOWS & EVENTS
SEMA SHOW Las Vegas USA. www.semashow.com

AAPEX- Automotive Aftermarket Products Expo   Las Vegas USA.
www.aapexshow.com/

ALABAMA INTERNATIONAL AUTO SHOWBirmingham USA.
www.carsbirmingham.com/

AUTOMOTIVE DYNAMICS AND STABILITY CONFERENCE & EXHIBITION
Detroit USA. www.sae.org/calendar/ads/index.htm

CAR CARE WORLD EXPO Las USA. www.carcarecentral.com/

CHICAGO AUTO SHOW Chicago USA. www.chicagoautoshow.com/

CHICAGO RV, CAMPING & VAN SHOW Rosemont USA.
www.chicagorvshow.com

DALLAS AUTO SHOW Dallas USA. www.dallasautoshow.org

SEMA INTERNATIONAL AUTOSALON Fort Washington USA.
www.semaautosalon.com/

JACKSONVILLE INTERNATIONAL CAR & TRUCK SHOW Jacksonville USA.
www.jaxautoshow.com/

MOTOR TREND INTERNATIONAL AUTO SHOW Las Vegas USA.
www.motortrendautoshows.com/lasvegas/index.html

NORTH AMERICAN INTERNATIONAL AUTO SHOW Detroit USA.
www.naias.com/

NORTH AMERICAN TRUCK SHOW Boston USA.
naexpo.com/truckshow/index.html

NORTHEAST WISCONSIN TRUCK EXPO Green Bay USA.
www.pmiwi.com/shows/truckshow.php

NEW YORK INTERNATIONAL AUTO SHOW New York USA.
www.autoshowny.com/

PHILADELPHIA AUTO SHOW Philadelphia USA. www.phillyautoshow.com/
PITTSBURGH INTERNATIONAL AUTO SHOW Pittsburgh USA.
www.pittsburghauto.org/PATA/main.cfm?section=auto

SAE - International Congress and Exhibition for Automotive Industry
Detroit USA. www.sae.org/congress/

SAN ANTONIO AUTO & TRUCK SHOW San Antonio USA.
www.saautodealers.com/

SEATTLE AUTO SHOW Seattle USA. www.seattleautoshow.com/

SOUTH FLORIDA INTERNATIONAL AUTO SHOW Miami USA.
www.sfliautoshow.com/index.html

SPOKANE INTERNATIONAL AUTO SHOW Spokane USA.
www.spokaneautoshow.com

TACOMA RV SHOW Tacoma USA www.oloughlintradeshows.com

THE GREAT AMERICAN TRUCKING SHOW Dallas USA. www.gatsonline.com

THE GREATER LEHIGH VALLEY AUTO SHOW USA
www.lehighvalleyautoshow.com/

THE GREATER MILWAUKEE AUTO SHOW Milwaukee USA
www.motortrendautoshows.com

THE NORTHEAST AUTO SHOW Providence USA
www.motortrendautoshows.com/

THE WORK TRUCK SHOW Indianapolis USA.
www.ntea.com/im/wts_default.asp

TRI - STATE INTERNATIONAL AUTO SHOW Suffern USA
www.rocklandexpo.com/

TRUCK CAMPER SHOW & RALLY Ogallala USA. www.truckcampershow.com/

TRUCK SHOW LAS VEGAS Las Vegas USA. www.truckshow.com

UTAH INTERNATIONAL AUTO EXPO Sandy USA.
www.motortrendautoshows.com/

VALLEY RV & CAMPING SHOW South Bend, USA. www.rvshows.org
VIRGINIA MOTOR TREND INTERNATIONAL AUTO SHOW Richmond, USA
www.motortrendautoshows.com

WASHINGTON AUTO SHOW Washington USA.
www.washingtonautoshow.com/

WEST PALM BEACH SPRING RV SHOW West Palm Beach, USA
www.frvta.org

WEST VIRGINIA INTERNATIONAL AUTO SHOW Charleston, USA
www.motortrendautoshows.com

IMPORTERS

DINLI                         EUBANKS AUTO ELECTRIC
Dallas, TX, 75229             DeKalb, TX, 75559
972-986-1889                  903-667-2081
972-986-1669                  903-667-3935
AUTOMOTIVE IMP MFG            MOTOR CAR PARTS &
Rancho Cordova, CA, 95742     ACCESSORIES
916-985-8505                  Torrance, CA, 90503
916-985-0366                  310-212-7910
                              310-212-7581
VALEO AUTO WIPERS             OGARA HESS & EISENHARDT
Auburn Hills, MI, 48326       Fairfield, OH, 45014
248-340-3000                  513-881-9800
248-340-3106                  513-874-2558
TEKSID                        MOTOREX
Sylacauga, AL, 35150          Gardena, CA, 90248-2128
256-401-2600                  310-523-2233
256-401-2601                  310-523-2235
ACE ALLOY WHEEL               PRESTIGE WHEEL ACCESSORIES
Chino, CA, 91710              Huntington Beach,CA, 92647
909-628-6680                  714-841-6333
909-628-6687                  714-841-6413
BEHR                          AUTOPAGE
Fort Worth, TX, 76106         Torrance, CA, 90501
817-624-7267                  310-618-2002
817-625-4427                  310-533-0258
CAROLINAS AUTO SUPPLY         ABC PARTS INTL
HOUSE                         Mineola, NY, 11501-3016
Charlotte, NC, 28206          516-248-4900
704-334-4646                  516-248-5079
704-334-4194
COLLISION AUTO PARTS SUPPLY   KEYSTONE AUTOMOTIVE IND
San Antonio, TX, 78237-3221   Phoenix, AZ, 85009
210-534-4899                   602-272-5911
210-534-5695                   602-272-5117
PARTS FIT IND                  POY AUTO PARTS SUPPLY
Addison, IL, 60101             Garfield, NJ, 7026
630-458-1060                   973-772-4206
630-458-1066                   973-772-0515
UNIVERSAL AUTO BODY SUPPLY     BUMPER WAREHOUSE
Chicago, IL, 60650             Saint Paul, MN, 55104
773-921-4444                   651-644-3456
773-921-3217                   651-644-0775
NATIONAL AUTOBODY PARTS        PARTSCHANNEL
Grand Prairie, TX, 75051       Tonawanda, NY, 14150
972-642-9584                   716-873-9700
972-642-9585                   716-873-1172
TOP SPEED AUTO ACCESSORIES     USA WHOLESALE CONNECTION
Addison, TX, 75001-4351        Compton, CA, 90220-4804
972-233-0888                   310-631-3108
972-233-0800                   310-631-0361
USUI INTL                      DUBOIS MARKETING
Monroe, OH, 45050              Allendale, MI, 49401-8834
513-539-4591                   616-895-6650
513-539-4596                   616-895-6652
TRW                            VIAM MFG
Cleveland, OH, 44124-3719      Santa Fe Springs, CA, 90670-6101
216-291-7000                   562-695-0651
216-291-7345                   562-695-1043
SUPREME WIRE WHEELS            AC AUTOTECHNIC ADVANCE
Rancho Cucamonga, CA, 91730    CONCEPTS
909-948-9899                   Azusa, CA, 91702
909-948-9090                   626-812-8388
                               626-812-8367
AIRTEX PRODUCTS                AMERICAN IND MFG SERVICE
Fairfield, IL, 62837           Murrieta, CA, 92562
618-842-2111                   951-698-3379
618-842-4069                   951-698-1379
AMERICAN TECHNOLOGY            ARVIN MERITOR
Elkhart, IN, 46514-8233        Franklin, IN, 46131
574-262-1258                   317-736-7111
574-264-9138                   317-346-2999
AUTOLIV NORTH AMERICA          AUTOMART INTL
Indianapolis, IN, 46278-1321   Hillside, IL, 60162-2001
317-875-7579                   708-449-7278
317-875-8171                   708-449-7378
AUTOMOTIVE SUPPLIES            BOS AUTOMOTIVE PRODUCTS
Fontana, CA, 92334-0518        Morristown, TN, 37814
909-428-9072                   423-585-0123
909-428-2035                423-585-0199
CELINA ALUMINUM PRECISION   COOPER STANDARD AUTOMOTIVE
TECH                        Novi, MI, 48376-8034
Celina, OH, 45822-9395      248-596-5900
419-586-2278                248-596-6515
419-586-6474
DANA CORP                   DELPHI PACKARD
Indianapolis, IN, 46268     El Paso, TX, 79906
317-871-7450                915-783-4200
317-871-7460                915-783-4279
DURA AUTOMOTIVE             EAKAS CORP
Milan, TN, 38358-3175       Peru, IL, 61354
731-686-8900                815-223-8811
731-686-3200                815-223-8898
EATON CORP                  ENGINEERED SINTERED
Athens, GA, 30601-3500      COMPONENTS
706-543-5250                Troutman, NC, 28166-9655
706-583-4700                704-528-0074
                            704-528-7529
FAURECIA EXHAUST SYSTEMS    FEDERAL MOGUL
Indianapolis, IN, 46530     Chicago, IL, 60638-1442
574-277-6984                708-563-0202
574-277-7059                708-563-0328
GKN AUTOMOTIVE              IMPORTED AUTO PARTS
COMPONENTS                  Avenel, NJ, 07001-2295
Mebane, NC, 27302           732-815-0100
919-563-7000                732-815-0440
919-304-7215
LEARS                       MANLEY PERFORMANCE
Grand Rapids, MI, 49504     PRODUCTS
616-252-3777                Lakewood, NJ, 08701-4531
616-246-3780                732-905-3366
                            732-905-3010
NEATON AUTO PRODUCTS MFG    NTN DRIVESHAFT
Rome, GA, 30165             Columbus, IN, 47201
706-368-9901                812-342-7000
706-368-9790                812-342-1155
SMITTYBILT AUTOMOTIVE       TENNECO AUTOMOTIVE
GROUP                       Ligonier, IN, 46767-2421
Corona, CA, 92879-2095      260-894-9400
951-272-3176                260-894-9494
951-736-8027
MIDLAND AUTOMOTIVE          D A INTL
PRODUCTS                    Galion, OH, 44833
Midland City, AL, 36350     419-462-1700
 334-983-1212                                        419-462-1688
 334-983-4789
 BENTELER AUTOMOTIVE                                 BERKELEY FORGE TOOL
 Fort Wayne, IN, 46808                               Berkeley, CA, 94710
 260-432-5569                                        510-526-5034
 260-432-6556                                        510-525-9014
 ANCHOR INTL TRADING                                 AMERICAN INTL LINE
 Geneva, IL, 60134                                   Bensenville, IL, 60106-1123
 630-262-5570                                        630-860-9396
 630-262-5574                                        630-860-9398
 ASTRO AUTOMOTIVE                                    INTERCONTINENTAL AUTO PARTS
 Franklin, MA, 2038                                  Mahwah, NJ, 7430
 508-528-2252                                        201-529-1988
 508-528-6650                                        201-529-0069
 UNITEX TRADING                                      PACIFIC VALVES
 Webster, TX, 77598                                  Long Beach, CA, 90807
 713-641-5360                                        562-426-2531
 713-649-8517                                        562-595-9717
 UNI NTF                                             JAMES KING & CO
 Arlington Heights, IL, 60005                        Sherwood, OR, 97140-8338
 847-364-6226                                        503-925-0408
 847-364-6456                                        503-925-8708



CUSTOMS TARIFF OF THE UNITED STATES (2006)
Tariffs can vary according to product and service from zero to 50 per cent or
more. All packaging and labeling must conform to all USA standards and there
are customs requirements for all imported goods. Binding rulings can be obtained
by contacting the Binding Ruling Clerk, US Customs. For more information
contact www.usitc.gov/tata/hts/bychapter/index.htm

Heading                                                              Rates of Duty
                     Article Description                             1                  2
                                                           General     Special

8708         Parts and accessories of the motor vehicles
             of
8708.10      headings 8701 to 8705: Bumpers and parts
8708.10.30   thereof: Bumpers                                        Free (A,AU,B,
             ..................................Stampings   2.5%      CA,CL,E,IL,J,JO,       25%
             .............................. Other                    MA,MX,P,SG)
             ..................................
8708.10.60   Parts of bumpers                              2.5%      Free (A,AU,B,          25%
             ............................Stampings                   CA,CL,E,IL,J,JO,
             .............................. Other                    MA,MX,P,SG)
             ..................................
                        Other parts and accessories of bodies
                           (including cabs): Safety seat belts                                 Free (A,AU,B,
                                     ............................ Other:           2.5%        CA,CL,E,IL,J,JO,              25%
8708.21.008                                                                                    MA,MX,P,SG)
708.29
8708.29.108        Inflators and modules for airbags ............                  2.5% 2.5%   Free (A,AU,B,      25%25%Free
708.29.1587           Door assemblies ......................... Body               Free 2.5%   CA,CL,E,IL,J,JO,   25%25%
08.29.21870                  stampings: For tractors suitable for                  2.5%        MA,MX,P,SG)
8.29.258708   agricultural use .... Other ...............................                      Free (A,AU,B,
.29.50                 Other ..................................Stampings                       CA,CL,E,IL,J,JO,
                                      ........................... Truck caps                   MA,MX,P,SG)Fre
                .......................... Other ...............................               e (A,AU,B,
                                                                                               CA,CL,E,IL,J,JO,
                                                                                               MA,MX,P,SG)
                                                                                               Free (A,AU,B,
                                                                                               CA,CL,E,IL,J,JO,
                                                                                               MA,MX,P,SG)
                Brakes and servo-brakes and parts thereof:
                Mounted brake linings: For tractors suitable
                 for agricultural use ....... For other vehicles
8708.31                                                                            Free 2.5%                      Free 25%
                                        ........................ Other:
8708.31.108                                                                                    Free (A,AU,B,
708.31.5087                                                                                    CA,CL,E,IL,J,JO,
08.39                                                                                          MA,MX,P,SG)
8708.39.108    For tractors suitable for agricultural use .......                  Free 2.5%                      Free 25%
708.39.50           For other vehicles ........................Brake                           Free (A,AU,B,
                                      drums .........................                          CA,CL,E,IL,J,JO,
                                                                                               MA,MX,P,SG)

              Brake rotors (discs) ................... Other
              ...............................
8708.40       Gear boxes:
8708.40.108   For the vehicles of subheading 8701.20                               2.5% 2.5%   Free (A,AU,B,      25%25%Free
708.40.2087   orheading 8702 or 8704 ........................ For                  Free 2.5%   CA,CL,E,IL,J,JO,   25%
08.40.30870   the vehicles of heading 8703 ............... For                                 MA,MX,P,SG)
8.40.50       tractors suitable for agricultural use ..........                                Free (A,AU,B,
              For other vehicles ...........................                                   CA,CL,E,IL,J,JO,
                                                                                               MA,MX,P,SG)
                                                                                               Free (A*,AU,
                                                                                               CA,CL,E,IL,J,JO,
                                                                                               MA,MX,P,SG)
8708.50         Drive axles with differential, whether or not
8708.50.108                  provided with other transmission
708.50.30            components: For tractors (except road
              tractors): For tractors suitable for agricultural
                 use ....... For other tractors ........................
                                                                                   Free Free                      Free 27.5%
              For vehicles of heading 8703 .................. For                              Free (A,AU,B,
8708.50.508    other vehicles ........................... Non-driving                          CA,CL,E,IL,J,JO,
708.50.8087    axles and parts thereof: For tractors (except                                   MA,MX,P,SG)
08.60                road tractors): For tractors suitable for                                 Free (A,AU,B,
8708.60.108         agricultural use ....... For other tractors                    2.5% 2.5%   CA,CL,E,IL,J,JO,   25% 25% Free
708.60.30                                           ........................       Free Free   MA,MX,P,SG)        27.5%
8708.60.50        For vehicles of heading 8703 ..................                  2.5%        Free (A,AU,B,      25%
                                                                                               CA,CL,E,IL,J,JO,
                                                                                               MA,MX,P,SG)
8708.60.80                 For other vehicles ...........................          2.5%        Free (A*,AU,B,     25%
                                                                                               CA,CL,E,IL,J,JO,
              Spindles ............................... Other                                   MA,MX,P,SG)
              ..................................
8708.70               Road wheels and parts and accessories
8708.70.05        thereof: For tractors (except road tractors):
                      For tractors suitable for agricultural use:
                                       Road wheels .........................       Free                           Free
8708.70.15                  Parts and accessories .................        Free                           Free
              For other tractors:
8708.70.25                       Road wheels .........................     Free                                     27.5%
8708.70.35                  Parts and accessories .................        Free                                     27.5%
              For other vehicles:
8708.70.45                  Road wheels ............................       2.5%        Free (A,AU,B,      25%
                                                                                       CA,CL,E,IL,J,JO,
                                                                                       MA,MX,P,SG)
              For vehicles of subheading 8701.20
              orheading 8702, 8704 or 8705 .............

              Other:
                                    Of aluminum ......................
                                     Other ............................
8708.70.60                Parts and accessories ....................       2.5%        Free (A*,AU,B,     25%
                                                                                       CA,CL,E,IL,J,JO,
                                                                                       MA,MX,P,SG)
                       Wheel rims for vehicles of
              subheading 8701.20 or heading 8702, 8703,
              8704, or 8705 ...................

              Wheel covers and hubcaps for vehicles of
              subheading 8701.20 or heading 8702, 8703,
              8704 or 8705 ....................

                                  Other ...............................
8708.80          Suspension shock absorbers: For tractors
8708.80.15         suitable for agricultural use: McPherson
                                       struts ........................     Free                                      Free
8708.80.25                      Other ..................................   Free                                      Free
              For other vehicles:
8708.80.308        McPherson struts ........................ Other         2.5% 2.5%   Free (A,AU,B,      25%25%
708.80.4587          .................................. Other parts and                CA,CL,E,IL,J,JO,
08.91                                       accessories: Radiators:                    MA,MX,P,SG)
                                                                                       Free (A,AU,B,
                                                                                       CA,CL,E,IL,J,JO,
                                                                                       MA,MX,P,SG)
8708.91.10    For tractors suitable for agricultural use .......           Free                                      Free
8708.91.508     For other vehicles ........................ Mufflers       2.5% Free   Free (A,AU,B,      25%Free
708.92          and exhaust pipes: For tractors suitable for                           CA,CL,E,IL,J,JO,
8708.92.10                              agricultural use .......                       MA,MX,P,SG)
                                                                                       Free (A+,AU,B,
                                                                                       CA,CL,D,E,IL,J,
8708.92.508    For other vehicles ........................ Clutches                    JO,MX,P,SG)2.2
708.93           and parts thereof: For tractors suitable for                          % (MA)
8708.93.15     agricultural use: Clutches ............................     2.5% Free                      25%Free
8708.93.30                        Other ...............................    Free                                      Free
              For other vehicles:
8708.93.608                 Clutches ............................ Other    2.5% 2.5%   Free (A,AU,B,      25%25%
708.93.7587           ............................... Steering wheels,                 CA,CL,E,IL,J,JO,
08.94                steering columns and steering boxes:                              MA,MX,P,SG)
                                                                                       Free (A,AU,B,
                                                                                       CA,CL,E,IL,J,JO,
                                                                                       MA,MX,P,SG)
8708.94.108   For tractors suitable for agricultural use .......           Free 2.5%                      Free 25%
708.94.50     For other vehicles ........................                              Free (A,AU,B,
                                                                                       CA,CL,E,IL,J,JO,
                                                                                       MA,MX,P,SG)
GENERAL CONTACTS

Indian Embassy in USA                U.S. Embassy
2107 Massachusetts Avenue, NW        Shantipath, Chanakyapuri
Washington, DC 20008                 New Delhi - 110021
Telephone: (202) 939-7000            Tel: 011-2419-8000
Fax: (202) 265-4351                  Fax: +91-11-2419-0017
www.indianembassy.org                www.newdelhi.usembassy.gov
Consulate general of India           Consulate General of US
3 East, 64th Street,                 5/1, Ho Chi Minh Sarani
New York, NY 10021                   Calcutta- 700071
Tel : 212-774-0600                   Tel:033-2282-3611
Fax : 212-861-3788                   www.calcutta.usconsulate.gov
www.indiacgny.org
Consulate General of India           Consulate General of US
540 Arguello Boulevard               No. 220, Anna Salai
San Francisco, CA 94118              Chennai - 600006
Tel : (415) 668 0662                 Tel:044-2811-2000
Fax : (415) 668 2073                 www.chennai.usconsulate.gov
www.cgisf.org
Consulate General of India           Consulate General of US
455 North City front Plaza Drive,    Lincoln House
Chicago, IL 60611                    78, Bhulabhai Desai Road
Tel: 312-595-0405                    Mumbai - 400026
Fax : 312-595-0416                   Tel:022-2363-3611
www.chicago.indianconsulate.com      www.mumbai.usconsulate.gov
Consulate General of India           Official Harmonized Customs Tariff
1990 Post Oak Blvd,                  Schedule
Houston, TX 77056                    US International Trade Commission.
Tel: 713-626-2148/9,                 500 E Street, SW
Fax: 713-626-2450                    Washington, DC 20436
www.cgihouston.org                   phone: 202-205-2000
                                     www.usitc.gov/tata/hts/bychapter/index.htm

Useful websites
Automotive Industries - www.ai-online.com
Smothers Parts International - www.carpart.com
AutoAll.com - www.autoall.com
CARQUEST auto parts - www.carquest.com
NAPAonline.com - www.napaonline.com

Associations
American National Standards Institute - www.ansi.org
Automotive Aftermarket Industry Association - www.aftermarket.org
National Highway Traffic Safety Administration - www.nhtsa.dot.gov
US patent and trademark office - www.uspto.gov
Automotive International Association (AIA) –www.aiaglobal.org
Automotive Parts Rebuilders Association (APRA) - www.apra.org
Automotive Service Association (ASA) - www.asashop.org
Automotive Warehouse Distributors Association - www.awda.org
Motor and Equipment Manufacturers Association - www.mema.org
National Automobile Dealers Association - www.nada.org
Society of Automotive Engineers (SAE) - www.sae.org
Specialty Equipment Market Association (SEMA) - www.sema.org
Association of International Automobile Manufacturers – http://www.aiam.org/
COUNTRY PROFILE




Full Country Name:   Canada

Population:          (2005 Est.) is 32.3 million

Capital City:        Ottawa

Ethnic Groups:       White 73 %, Black 10%, Asian 7%,
                     Aborigines 4%, Others 6%.

Currency:            1 US Dollar = 1.12 Canadian Dollar.

Government:          Canada is a constitutional monarchy
                     and a federal state with a democratic
                     government.



Climate:             Colder in the north and warmer in the
                     south. Canadian winters are long and
                     hard
BASIC ECONOMIC FACTS
GDP:                      Purchasing power parity - $1,061.9 Billion (05)

GDP per head:             Purchasing power parity - $ 32,905 (2005)

Annual GDP Growth:        2.6% (2005)

Inflation:                2.3% (2005)

Unemployment:             6.1% (January 2006)

Major Industries:         Highly diversified and technologically advanced
                          industry; transportation equipment, chemicals,
                          processed and unprocessed minerals, food
                          products, wood and paper products, fish
                          products, petroleum and natural gas

Major Trading Partners:   Canada‟s biggest trading partner in global
                          markets is US (88.1), followed by Japan (2.0),
                          UK (1.2), and China (1.0).

Exports:                  $453,060.1 Million (2005)

Exports - commodities:    Machinery   and     equipment,      automotive
                          products, Industrial goods and materials,
                          Energy products, and raw materials.

Imports:                  $388,210.3 Million (2005)

Imports - commodities:    Automotive products, Industrial goods and
                          materials, petroleum products, Capital goods,
                          consumer goods, and industrial raw materials.

The Market:               It has an integrated economy and every major
                          industry is represented. With the exceptions of
                          a few import quotas and some strategic
                          industry ownership restrictions, there are no
                          limitations on foreign firms seeking to do
                          business in Canada.

Trade in goods:           The total Canadian trade in goods in 2005 was
                          $841,270 million, an increase of 6.05% over
                          2004.
Balance of Trade:             The trade surplus at the end of 2005 was
                              64,849.8 million as against 65,482.4 million in
                              2004.

Investment:                   FDI in the Canada reached $ 415,561 million in
                              2004. Although Canada has some restrictions
                              in FDI in some sectors, foreign investors are
                              generally treated on par with domestic
                              business.

Current Economic Situation:   In 2005, GDP growth was 3.69 % on the back
                              of strong consumption. The forecast for 2006
                              growth is 3.0%. However, CPI increased to
                              127.3 in 2005 from 124.6 in 2004 due to higher
                              energy prices. The inflation rate is about 2.9%.
BRIEF ECONOMIC REVIEW
The Canadian economy is the eighth largest in the world, behind the US, Japan,
Germany, the UK, France, Italy and China. It is highly integrated with the US
economy, which absorbed 81% of its exports and was the source of 67% of its
imports in 2005. Most Canadians live in a narrow strip (160 km wide) north of the
US border, making them sensitive to the threat of US economic and cultural
domination. Almost 70% of Canadians are English-speakers; 15% speak only
French but these form a majority in Quebec, Canada‟s second-largest and
second most populous province.

The federal corporate income tax rate is 21%. The federal corporate surtax of 4%
will be eliminated for all businesses by 2008. Provincial governments charge
corporate tax at rates between 10% and 16%. Merchandise exports on a
balance-of-payments basis rose by 5.7% year on year to C$454bn (US$375bn)
in 2005 as growth in the US economy remained strong and bilateral trade with
China soared. Merchandise imports rose by 6.6% to C$387bn. The merchandise
trade surplus rose slightly to C$66.7bn in 2005 from C$66.1bn in 2004. 40% of
GDP comes from exports of goods and services. Canadian economy is services
oriented as it forms 69.5%, the industry covers 28.9 of GDP and the Agriculture
has 2.1% of the GDP.

Major trading partners of Canada are (% share):

1. US (88.1)
2. Japan (2.0)
3. UK (1.2)
4. China (1.0)

Exports include automobile manufacturing, pulp and paper, iron and steel work,
machinery and equipment manufacturing, mining, extraction of fossil fuels,
forestry and agriculture. Canada's leading exports are automobile vehicles and
parts, machinery and equipment, high-technology products, oil, natural gas,
metals, and forest and farm products. The industry is struggling with weak
exports due to the strong loonie, the rising cost of raw materials and softening
demand. Labor costs are also eating into profits, as unionized and retired
workers are costing more each year in wages and health care costs, leaving
domestic producers like GM and Ford less competitive than Toyota, Honda or
other manufacturers that assemble cars in countries with lower labor costs.


  Major exports 2004       % of total   Major imports 2004         % of total
  Machinery&equipment      21.3         Machinery&equipment        28.6
  Automotive products      21.1         Automotive products        21.3
  Other industrial goods   18.1         Other industrial goods     20.2
  Energy products          15.8         Other consumer goods       13.1
INTRODUCTION TO LOCAL MARKETS
Canada is the eighth largest vehicle producer in the world. The auto sector is
Canada's biggest contributor to manufacturing Gross Domestic Product (GDP)
and supports jobs in 13 assembly plants, over 540 parts manufacturers, 3900
dealerships and many other related industries. The Canadian automotive sector
is highly competitive, accounting for 4.5% of total world production and a global
trade surplus in finished vehicles of more than $29 billion. This accounts for 63%
of Canada‟s 2002 global trade surplus of $46.2 billion.

The auto industry is Canada‟s largest manufacturing industry.            For the
automotive original equipment supply industry, sales in 2003 were $34 Billion
from a high of $36 Billion in 2000. This is consistent with results of the 2002
calendar year but a decline of a lower percentage than that experienced by
vehicle assemblers and is due to the fact that 2/3 of Canadian parts production is
directly exported. Nevertheless, substantial vehicle assembly plant investment is
required in Canada for the automotive original equipment supply industry to
prosper because suppliers who are closest to vehicle assembly plants have the
best opportunity to acquire more business. Recent announcements made by
Ford of Canada along with the Federal and Ontario Government‟s are very
encouraging.

Canada's auto and auto parts sector is a good news–bad news story. Weak
sales in Canada and the United States are leading to production cuts at all of the
Big Three automakers in Canada. The strong Canadian dollar will also continue
to weaken exports over the near term. But the Big Three are still investing billions
to enable processes such as flexible manufacturing. And Toyota is building a
whole new assembly plant in Woodstock, Ontario, as well as a new parts plant.
Overall, therefore, sector profits will recover this year from the plunge they took
last year, and then continue climbing to reach $3.6 billion in 2007. From 2008 to
2010, profit margins will stabilize at about 3 per cent, with margins for parts
producers slightly higher than those for assemblers. Profits will range between
$3.6 billion and $5.2 billion, significantly lower than at the end of the 1990s.

The automotive parts market in Canada, valued at US$30.7 billion in 2001,
increased 6.8 percent to US$32.4 billion in 2002. The value of this sector is
projected to reach nearly US$41 billion in 2003, a real growth rate of 6.2 percent
over 2002. (Please note that the dramatic rise in the value of the Canadian dollar
in early 2003 has had a huge impact on the US dollar figures used in the Best
Prospects reports.) According to industry experts, the automotive parts sector
will continue to experience annual real growth rates of between 5 -7 percent over
the next few years and will be expanding by over 10 percent per annum by the
end of the decade.

US exports of automotive parts to Canada are expected to keep step with the
market and expand at an annual real growth rate of around 6 -7 percent in the
short term. US automotive parts exports to Canada, valued at US$23.0 billion in
2001, grew 4 percent in 2002, and are expected to expand a further 5 percent in
real terms during 2003 to reach US$30.2 billion. The Canadian auto industry
remains healthy, despite strong headwinds from a soaring Canadian dollar, and
statistics indicate that Canada's auto sector continues to outperform its much
larger US counterpart.

Canadian vehicle sales rebounded in May 2003 to an annualized 1.72 million
units, from 1.61 million during the previous four months. Industry experts project
that total 2003 vehicle sales in Canada will exceed 1.65 million units. Canadian
auto industry shipments - assemblies and parts - climbed a solid 4.5 percent
year-over-year in the first quarter of 2003. Vehicle production is also holding up
well,    edging down        only 1       percent from     the    previous year.

Following spectacular growth of 8 per cent in 2004, production growth in
Canada‟s auto and auto parts industry will come to a screeching halt in 2005,
posting a meager 0.1 per cent for the year and leaving industry profits at $3.6
billion. In 2006, output will grow by 3 per cent, leading to overall profits of $4.6
billion. From 2007 to 2009, overall profits will range between $4.5 billion and $5.3
billion, significantly lower than at the end of the 1990s and in 2000. Profit margins
in parts production will be higher than those for assemblers.

EDC‟s Trade Opportunities Matrix (TOM) points to some of these same high-
value sectors – professional and scientific measurement equipment, electrical
and electronic products, aerospace products, office and computing equipment
and engines and turbines – as being good opportunities for Canadian exporters
in India. TOM is a piece of intelligent software built on a massive historical
sectoral database to rank opportunities in various target export markets.

The Canadian government hopes that much of this investment will take the form
of public-private partnerships, which will mean attracting a lot of foreign
investment. This has not been one of India‟s strengths in the past – annual
inflows of investment have been rising in recent years, but still only amounted to
US$6.7 billion in 2005. Canadian investment into India sits at a paltry $250
million. There is little doubt that participating directly in the next phase of India‟s
development will require that foreign investors overcome their traditional
reluctance to invest there.

LOCAL MANUFACTURERS

The Canadian automotive industry produces light-duty vehicles (cars, vans, sport
utility vehicles, pickup trucks) and heavy-duty vehicles (trucks, buses, military
vehicles) as well as a wide range of parts, components and systems for these
vehicles. The industry accounts for 14% of Canada's manufacturing gross
domestic product. The major foreign companies with large light-duty vehicle
assembly operations in Canada are General Motors, DaimlerChrysler, Ford,
CAMI (GM-Suzuki), Honda and Toyota. While some parts and systems
manufacturers are large, 72%, have fewer than 50 employees. In 2001, Canada
ranked seventh in world vehicle production, behind the United States, Japan,
Germany, France, Spain and South Korea. The Harbour and Associates 2001
Report estimates that Canada is 7% more productive in high-volume vehicle
assembly than the U.S. in terms of employee hours worked. Overall, in 2000,
Canada maintained an automotive trade surplus. Total exports were worth
$91.43 billion, while total imports were valued at $79.20 billion. Specifically,
Canada's trade deficits with Japan, Europe and Mexico were counterbalanced by
a $25.9 billion surplus with the U.S

GLOBAL IMPORTS

              2001             2002          2003           2004           2005
U.S.          14,566,118,646   15,641,926,686 15,632,955,626 17,096,874,881 16,966,800,031
Japan         670,160,217      734,585,334   745,057,624    937,908,766    936,886,685
Mexico        459,957,066      540,216,121   449,450,354    688,436,392    746,140,378
Germany       86,938,740       94,435,164    116,342,296    247,248,754    294,160,394
China         49,881,954       64,465,213    90,046,037     136,447,154    221,352,772
Re-Imports
(Canada)      74,503,227       70,720,800    93,825,789     111,960,403    151,591,339
Taiwan
(Taipei)      61,728,838       71,747,154    70,855,642     91,914,543     98,217,592
Korea, South 26,661,693        38,967,269    53,474,597     84,423,084     96,970,240
Italy         45,082,549       40,451,529    54,653,349     63,975,575     68,128,917
Spain         45,979,329       44,603,804    40,747,836     55,554,173     63,128,584
Brazil        43,421,598       46,797,253    39,888,703     58,123,006     56,917,999
U.K.          48,665,143       47,435,038    43,503,217     35,621,819     46,271,825
Austria       21,057,052       17,392,228    20,180,741     21,065,189     38,576,170
Venezuela     2,766,816        3,083,493     12,401,047     12,178,979     25,364,486
India         6,741,898        9,395,991     13,051,418     16,980,560     23,137,334
France        19,187,008       12,416,524    14,202,169     18,260,142     21,624,508
Thailand      3,429,923        5,631,105     11,200,801     9,254,324      19,598,752
Australia     8,654,146        10,387,091    9,552,815      17,553,286     18,168,707
Sweden        7,078,835        8,640,063     11,611,521     13,323,286     16,173,049
Switzerland   13,595,537       15,292,206    16,590,679     13,272,766     11,003,679
Argentina     2,125,770        1,986,391     4,474,582      7,105,231      9,153,630
Turkey        1,780,866        2,415,114     2,715,389      3,722,963      5,989,294
Honduras      1,217,626        701,165       384,176        1,945,645      5,960,711
South Africa 3,348,231         3,895,460     5,634,216      4,334,004      5,879,091
Belgium       4,250,696        3,225,963     4,092,145      3,855,505      4,563,773
Poland        557,420          5,943,396     9,621,386      2,378,805      4,278,817
            2001            2002              2003         2004              2005
Israel      2,083,588       3,150,588         2,124,782    2,988,199         4,174,619
Indonesia   1,354,547       2,439,087         2,505,942    4,445,570         4,136,431
Malaysia    2,881,284       2,381,296         2,835,145    2,585,603         3,334,724
Czech
Republic    737,724         1,332,015         3,845,537    4,628,032         3,193,642
Singapore   6,371,040       4,744,550         2,597,930    3,654,299         2,815,901
Finland     2,618,115       2,346,549         2,345,581    2,323,998         2,362,076
Netherlands 2,321,942       2,501,373         2,905,169    2,679,480         2,161,882
Hungary     1,893,535       2,106,984         2,258,804    2,044,177         1,933,975
Denmark     902,365         978,806           1,359,798    1,362,860         1,690,519
Hong Kong   545,814         556,147           931,277      685,188           858,648
TOTAL (ALL
COUNTRIES) 16,300,210,083   17,564,812,029 17,597,938,493 19,791,192,577 19,996,096,933



IMPORTS FROM INDIA
India is much in the news lately, as it comes into its own as a full participant in
the globalization phenomenon. India is rapidly becoming a serious market for
Canadian companies, with goods exports surpassing the C$1 billion mark for the
first time in 2005. The top Canadian exports to India were pulp and paper,
fertilizer, beans, lentils, and metals. Canadian exports to India were up 20% in
2005, well ahead of our average growth rate across all countries of around 5%.

This performance sounds spectacular, but India‟s total imports rose by 27% in
2005, which indicates that Canada is experiencing a small loss of share in the
Indian market. Indeed, although Canada ships about 4% of total world exports,
exporting over our weight given that our economy represents only 2% of the
world economy, Canada‟s share of the Indian market is a modest 0.6%.
Although the main Canadian exports to India are resource-based, there is a
smaller group of high-value industries where Canadian exports are growing very
rapidly. Such products as navigational, medical, measuring and control
instruments; telecom equipment; metalworking machinery; and aerospace
products have seen average annual growth over the past five years in excess of
60%.

                                       2001       2002    2003        2004       2005
1. Values in US$ Million              2.86       2.70     3.80       4.51       6.27
2. %Growth                                       -5.68    40.73      18.82      38.98
3. Total export                       299.82     301.88   372.58     481.74     669.05
4. %Growth                                       0.69     23.42      29.30      38.88
5. %Share of country (1 of 3)         0.95       0.89     1.02       0.94       0.94
 Products HS 8708 - MOTOR VEHICLE PARTS (EXCL. BODY, CHASSIS
 AND ENGINES) Origin India Destination CANADA




MAJOR COMPETITORS
TRADE BARRIERS
Canada requires bilingual labeling (English and French) for most products. The
federal Consumer Packaging and Labeling Act require bilingual designation of
the generic name on most prepackaged consumer products. The agency
responsible for inspection of imports, Canada Customs and Revenue Agency,
also requires an indication of the country of origin, such as "Made in India," on
several classes of imported goods. Goods not properly marked cannot be
released from Canada Customs until suitably marked.

The Province of Quebec requires that all products sold in that province be
labeled in French and that the use of French be given equal prominence with
other languages on any packages or containers. The Charter of the French
Language requires the use of French on product labeling, warranty certificates,
directions for use, public signs and written advertising.

Finally, industry is charged with ensuring that any claims about a product being
"environmentally-friendly" are accurate and in compliance with relevant
legislation. In general, environmental claims that are ambiguous, misleading or
irrelevant, or that cannot be substantiated, should not be used. In all cases,
environmental claims should indicate whether they are related to the product
itself or to the product's packaging materials. The Canadian government has
issued a set of guiding principles governing the use of environmental labeling
and advertising, which may be obtained by contacting Industry Canada.

Under the provisions of the Canadian Customs tariff regulations, certain items
are regulated under the Export and Import Permits Act and require a permit for
importation into Canada. The Act lists various agricultural products (poultry,
eggs, and dairy products), a number of textile and clothing items, and certain
steel products. Inquiries regarding the issuance of import permit and quota
allocations should be directed to the Department of Foreign Affairs, Export and
Import Controls Bureau in Ottawa. Tel: 613-996-3711 (textiles and clothing); Tel:
613-995-8358 (steel products); Tel: 613-995-2744 (agricultural products).

The Canadian government is concerned with protecting its citizens from faulty or
unsafe products. Under the aegis of the Standards Council of Canada (SCC),
several private standards-writing organizations administer technical codes and
standards for areas ranging from electrical and plumbing products to health-care
technology. These organizations include: The Canadian Standards Association
(CSA), Underwriters Laboratories of Canada (UL), The Canadian General
Standards Board, and The Canadian Gas Association. The Canadian federal
government also has numerous commodity standards to safeguard public
welfare. The standards organizations try to avoid duplication of responsibility,
but there is some overlap.

Indian manufacturers and exporters should determine what standards are
applicable to their products. If certification is required, it generally must be
obtained before the goods are imported into Canada. The process can be time-
consuming and, therefore, certification should be one of the first steps taken to
establish an export market in Canada.

With the exception of one special trade zone at the Sydport Industrial Park in
Cape Breton, Nova Scotia, Canada has no free ports or free trade zones. At
present, there are no federal or provincial laws specifically governing the
establishment and operation of such zones. Goods may be cleared at Customs
offices on the border or may be forwarded to a bonded warehouse for storage
pending customs examination and clearance. Goods may be sent to a bonded
warehouse without the payment of duty, but must be cleared either for export or
Canadian consumption within two years. Extended periods are allowed for
certain goods. Goods taken from bonded warehouses for consumption are
dutiable at rates of the Customs Tariff in effect at the time, and the value for duty
purposes is the value at the time of entry for warehousing.
Minor operations such as repackaging and sorting can be carried out in bonded
warehouses with the permission of Canada Customs and Revenue Agency, but
assembly or other industrial activity is prohibited.

Canada is a member of the World Trade Organization (WTO) and was a
founding member of its predecessor, the General Agreement on Tariffs and
Trade (GATT). Canada has also been an active member of both the Asia-Pacific
Economic Cooperation (APEC) forum and the Free Trade Area of the Americas
(FTAA) negotiation process.


CUSTOMS TARIFF OF THE CANADA

The Customs tariff for Auto part and accessories in Canada varies between 6.5
to 0 %. For detailed information log onto - http://www.cbsa-
asfc.gc.ca/general/publications/tariff2006/t2006-3/ch87ne.pdf



TRADE SHOWS & EVENTS

ATLANTIC TRUCK SHOW , Moncton, Canada. Atlantic Provinces Trucking
Association. www.apta.ca

CALGARY INTERNATIONAL AUTO & TRUCK SHOW , Calgary, Canada.
Calgary Motor Dealers Association. www.calgarymotordealers.com

CANADIAN INTERNATIONAL AUTOSHOW, Toronto, Canada. Canadian
International Autoshow. www.autoshow.ca
EXPOCAM , Montreal, Canada. dmg world media. www.dmgworldmedia.com

RV & CAMPING INDUSTRY CONVENTION , Ottawa, Canada. RV & Camping
Convention. www.rvconvention.ca

TRUXPO, Edmonton,      Canada. Alberta Motor Transport Association.
www.amta.ca


GENERAL CONTACTS

High Commission of India               Canadian High Commission
10 Springfield Road                    7/8 Shantipath, Chanakyapuri
OTTAWA, ONTARIO K1M 1C9                New Delhi 110 021, India
Telephone: (613)744-3751/52/53         Telephone: +91 (11) 4178-2000
Fax: (613)744-0913                     Facsimile: +91 (11) 4178-2020
Email: hicomind@hciottawa.ca           E-mail: delhi@international.gc.ca
Consulate General of India             Consulate General of Canada
1835 Yonge St. (4th Floor)             Fort House, 6th Floor
TORONTO, ONTARIO M4S 1X8               221, Dr. D.N. Road
Telephone:(416) 960-0751/52,           Fort, Mumbai 400 001
Fax:(416)960 9812                      Tel: +9122-55494444
Telex:06-22242                         Fax: +9122-55494454
Email: cgindia@cgitoronto.ca           E-mail: mmbai@international.gc.ca
Consulate General of India             Consulate General of Canada
325 Howe Street, 2nd Floor             SCO# 54-56, Sector 17 A
VANCOUVER, B.C. V6C 1Z7                Chandigarh 160 017, India
Telephone: (604) 662-8811              Telephone: +91 (172) 505-0300
Fax: (604) 682-2471                    Fax: +91 (172) 505-0320
Email: indiacg@telus.net,              E-mail: CHADG-G@international.gc.ca
indiapscg@telus.ne
Automotive Industries Association of   Canadian Consulate
Canada (AIA)                           18 (Old 24), 3rd floor YAFA Tower
1272 Wellington Street West            Khader Nawaz Khan Road,
Ottawa, ON K1Y 3A7                     Nungambakkam
Telephone: (800) 808-2920              Chennai 600 034, India
Fax: (613) 728-6021                    Tel: (+91 44) 2833 0888
Email: info.aia@aiacanada.com          Fax: (+91 44) 5215 9393
                                       E-mail: cheni@gocindia.org
Automotive Parts Manufacturers'        The Office of the Chief Economist
Association (APMA)                     Trade and Economic Analysis Division
10 Four Seasons Place, Suite 801       (EET)
Toronto, Ontario, CANADA               http://www.international.gc.ca/eet/
M9B 6H7
Tel: (416) 620-4220
Fax: (416) 620-9730
E-mail:info@apma.ca
Japanese Automotive Manufacturers         Canada Border Services Agency
Association (JAMA) Suite 460, 151         Ottawa ON K1A 0L8
Bloor Street West,                        Phone : (204) 983-3500 or (506) 636-
Toronto, Ontario, Canada                  5064
M5S 1S4                                   Email: CBSA-ASFC@canada.gc.ca
Telephone 416-968-0150                    Web: http://www.cbsa-asfc.gc.ca
FAX 416-968-7095
JAMA@jama.ca
Association Of International Automobile   Canadian Vehicle Manufacturers
Manufacturers Of Canada                   Association (CVMA)
438 University Avenue                     170 Attwell Drive
Suite 1618, Box 60                        Suite 400
Toronto, Ontario                          Toronto, Ontario
M5G 2K8                                   M9W 5Z5
Tel: (416) 595-8251                       Phone 416.364.9333
Fax: (416) 595-2864                       Fax 416.367.3221
E-mail: auto@aiamc.com                    E-mail info@cvma.ca

Canadian Recreational Vehicle             Canadian Transportation Equipment
Association                               Association
2175 Sheppard Avenue East, Suite          16 Barrie Blvd., Unit 3B, St. Thomas,
310, Toronto, Ontario M2J 1W8             Ontario N5P 4B9
Fax: 416-491-1670                         Telephone: 519-631-0414,
Web: http://www.crva.ca                   Fax: 519-631-1333
                                          E-Mail: transportation@ctea.on.ca
North American Automobile Trade           Transportation Equipment and Special
Association                               Vehicles Manufacturers Association
70 East Beaver Creek Road                 1512, rue Michaud
Suite 30                                  Drummondville (Québec)
Richmond Hill, Ontario, Canada            J2C 7V3, CANADA
L4B 3B2                                   Téléphone : (819) 472-4494
Tel: 905-882-7040                         Fax : (819) 472-6520
Email: naata@naata.org                    Email: info@ametvs.com

								
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